Wisconsin greens drop opposition to coal plant

By Bernie Woodall

LOS ANGELES (Reuters) - Environmentalists pulled opposition to an expansion of what will be the biggest coal-fired power plant in Wisconsin after gaining concessions from We Energies and two smaller utilities, environmental and utility officials said on Wednesday.

We Energies, the principal unit of Wisconsin Energy Corp, Madison Gas & Electric and Wisconsin Public Power now expect to open the first of two new 615-megawatt units in fall 2009 at the Oak Creek Power Plant on Lake Michigan south of Milwaukee.

We Energies will own 86 percent of the new units and have that share of the generation, with each of the other two utilities owning 7 percent. We Energies fully owns the existing four coal-fired units at Oak Creek, which were built from 1959 to 1967.

The second 615-MW unit is to open in 2010, We Energies said. After the $2.1- to $2.2-billion expansion, Oak Creek will be the biggest coal power plant in the state. Oak Creek's production capacity will rise to about 2,300 MW capable of serving about 1.8 million homes.

The Sierra Club and Clean Wisconsin agreed to drop legal challenges regarding Oak Creek's once-through cooling system after the utilities agreed to concessions including retirement by 2012 of two older coal units at the We Energies Presque Isle Power Plant in Michigan's Upper Peninsula.

The three utilities agreed to support state legislation to push up to 2013 from 2015 Wisconsin's renewable energy standard to 10 percent of electricity generation and to increase that standard by 2025 to 25 percent.

The utilities will also seek state regulator approval to dedicate about $100 million over 25 years to protect Lake Michigan.

Bruce Nilles, an attorney who leads the Sierra Club's national fight against coal power and is based in Wisconsin, said environmentalists got as much as possible.

"We've been fighting (Oak Creek's expansion) for more than seven years, and, despite our best efforts, it is under construction," said Nilles.

"It's time to put this one behind us and focus on the other ones that are in the pipeline," said Nilles.

That focus in Wisconsin is now on the proposed Alliant Energy 300-MW coal/biomass unit at the Nelson Dewey coal plant in Cassville.

Alliant has promised to retire an old coal-fired plant, add more wind power and increase the biomass portion of the plant in Cassville if the state agrees to approve it.

Alliant wants to open the new $1.2 billion Cassville unit in 2013.

We Energies has more than 1.1 million electricity customers in Wisconsin and Michigan. Madison Gas & Electric has 136,000 power customers in the Madison, Wisconsin area. Wisconsin Public Power is a regional power company serving 49 of the state's 82 municipal utilities, and has 190,000 customers.

(Reporting by Bernie Woodall, editing by Marguerita Choy)